Gift Aid Update

24 April 2017

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Gift Aid Small Donations Scheme

The Small Charitable Donations and Childcare Payments Act received Royal Assent in January 2017 and makes amendments to the legislation that underpins the Gift Aid Small Donations Scheme (GASDS). The changes have been made to simplify the scheme and extend access to smaller and newer charities. The key amendments are as follows:

  • removes the condition that charities must be registered for at least two tax years before making a claim
  • removes the condition that charities must make at least two out of four successful Gift Aid claims before making a claim through the GASDS
  • allows for contactless payments as well as cash
  • the community buildings rules are amended so that charities will not be able to claim under both the main allowance and the community buildings allowance rules
  • donations raised outside the community building but in the same local authority area will be eligible for GASDS.

This Act takes effect from 6 April 2017. Further details on the Act are available here.

 

Updated Gift Aid Spreadsheets

In response to an analysis of common errors made by charities when submitting Gift Aid Small Donations Scheme (GASDS) claims, HMRC have made available revised instructions and spreadsheets. Please click here to download a copy.

 

Gift Aid Donor Benefit

The government have been reviewing the Gift Aid donor benefit rules with the intention of simplifying them. The government launched a consultation in early 2016 (now closed) setting out a range of options for simplifying the current rules:

  • removing or reducing the monetary thresholds. For example value of the benefit for donations up to £100 can equate to 25% of the donation; capped at £25 for donations between £100-£1000.
  • setting a disregard limit for low value benefits
  • withdrawal or legislate the Extra Statutory Concessions for example using the averaging method.

The government issued a response to the consultation. The key points were as follows:

  • there is no consensus regarding monetary thresholds therefore a further set of proposals have been put forward for response
  • positive responses were received to disregard low value benefits, but further questions arose that have been put forward for response
  • the government intends to legislate all four of the Extra Statutory Concessions.

A number of new questions relating to these proposals have arisen and we will update you on the final revisions to these rules. More information is available here.

 

Gift Aid and Intermediaries

New processes being introduced by HMRC will make it easier for individuals to give to charities through digital channels. Currently a donor has to complete a Gift Aid declaration (GAD) each time they give to a new charity through an intermediary. This has resulted in restrictions on the take up of Gift Aid when donating through digital channels such as SMS.

From 6 April 2017 new rules will allow a donor to give permission to an intermediary to create GADs on their behalf for all subsequent donations made in that tax year.

There are new penalties for intermediaries that breach their obligations. The obligations include keeping records of:

  • the donor’s authorisation allowing them to complete declarations on the donor’s behalf
  • the date on which the Gift Aid regime was explained to the donor
  • cancellation of any of the donor’s authorisations
  • the annual statement. An annual statement must be sent to donors who use the new process.

These changes could increase the number of Gift Aid donations available for your charity. More details on this policy paper can be found here.

 

This article features in our Charity Newsletter Spring 2017. To see the full version please click here.

If you would like to find out more about any of the topics covered in our Charity Newsletter and how we at Robinson Reed Layton can assist, please contact our Charities Partner, Mark Williams, on 01872 276116 or mark.williams@rrlcornwall.co.uk. You can signup to receive our Charity Newsletter here.

This publication has been prepared by Robinson Reed Layton. It is to be treated as a general guide only and is not intended to be a comprehensive statement of the law or represent specific advice. No liability is accepted for the opinions it contains, or for any errors or omissions. All rights reserved.

Updated 24 April 2017